The annual prize was established to reward creative use of new information, ideas and technologies to involve citizens in public issues.
One of the seven finalists will receive the $10,000 first prize in a ceremony at the US national press club in Washington, DC.
Six other $1000 awards will also be made at the event in September.
This year's finalists include a searchable Congress database, run by The Washington Post, which contains every recorded vote in the US House and Senate since January 1991.
The Transparent Newsroom project run by the Spokane Spokesman-Review was nominated for webcasting its daily news meetings and offering online chats where readers can criticise news coverage or pose questions.
The newspaper's website also posts raw documents, such as interview transcripts and even handwritten reporter notes.
Nominee Global Voices Online is a network of global news run by multilingual editors who present and translate citizen news from outside North America and Western Europe.
HealthNewsReview is a clearing house for health news to help journalists write accurate medical reports and consumers find useful health news.
Developed by the Sarasota Herald-Tribune to track tropical storm and hurricane activity, IBISEYE.com calculates specific buildings that are at risk as well as reporting actual storm damage in Florida.
Users can also track storms, submit their own forecasts and assess possible damage.
Bakersfield Californian's social media platform, Bakomatic, a MySpace-like social network, was nominated for dedicating itself to solely cover Bakersfield, California, allowing residents to submit stories, photographs and events for publication.
The final nominee TCDailyPlanet - a local news website for Minneapolis and St Paul, Minnesota - brings together more than 35 local and ethnic news organisations and trains citizens to participate and contribute to the news.
The finalists were selected from 109 entries, submitted by print, television and online news organisations and education and non-profit institutions.
J-Lab, the institute for interactive Journalism at the University of Maryland, administers the awards.
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